June 18, 2025 • 36 mins
We kick off with the wild moves sweeping through uranium, breaking down SPUT’s raise, the squeeze mechanics, and whether valuations have run too hot.
Next up: the drama at New World Resources, where a bidding war could be brewing.
And to wrap, a juicy chat about Black Cat’s bold call to stash gold instead of Aussie dollars — and what it says about the market mood.
.……………
TIMESTAMPS
(00:00) Introduction
(00:48) Uranium mania (again)
(19:09) NWC: A brewing bidding war
(28:19) Should goldies hold bullion over cash
(32:27) Which miner holds the most gold?
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
If you're an insto investor in the space and you sort of catch
wind that they're going to do like a decent raise 100.
Million for spot for spot. You know it's on like it's, it's
so on when you catch wind that there's, you know, the equities
are just going to RIP you dogs.
(00:25):
Uranium, JD uranium, it just hadits biggest one day spike in
years and it all started with spotlighting the fuse.
A surprise $100 million raise for the financial reactor has
been upsized to $200 million andit sent the uranium equities
flying. Why we dive into this?
Plus, copper juniors get even hotter.
The takeover of newer resources is getting competitive.
(00:46):
Please be a bidding war and should gold companies hold the
gold or generate cash? We're going to share some
thoughts on this. Let's dive in JD, what the hell
is going on in the uranium market, mate?
Let's. RIP in, we've got some awesome
stuff to talk about. So uranium first up, I'm sure
that's what a lot of people are keen to here.
So sort of seeing news come out over late Sunday and then into
(01:07):
early this week all centered around Spot, the Mighty spot,
spot Physical, Uranium Trust. So that is the unit that just
holds £66 million plus of uranium.
They get cash, they buy more. So like you said, 100 million US
raising upsize to 200 and we're going to talk about that dynamic
(01:28):
a bit also very interesting. And you mentioned the word sort
of surprise raising there. It was right because they raised
money it over $25 million just in May.
So a bit going on there. And and obviously the the stocks
just rocketed for Monday, Tuesday like deep yellow on
Monday was up 20% plus Boss 16 and Paladin about 15% all in on
(01:53):
the Monday that was. And then if you look at the
Sprott Uranium Miners ETF, so the basket of all these names
that trades in the North American markets, that was up
about 7%. So spot itself has settled a
bit. It it jumped up from kind of 17
ish to to about 18 bucks and then has come back down to the
(02:14):
low seventeens. But yeah, it's been super
volatile the last few months. We've had that sort of narrative
of or maybe spot has to sell some pounds to finance itself.
That's sort of washed away and it's just, it's just turned like
that, right? It's turned probably because of
some opportunism from the financial sector.
(02:35):
JD, let's start with Spot itself, because this is the the
trust of the vehicle. It's a Sprott unit trust, which
is effectively accumulating pounds of uranium.
Yeah, typically this this vehicle can only add more pounds
when it trades above NAV, which it hasn't done in quite some
time. However, this placement and the
(02:57):
last one have have been able to get over the line.
Yeah. I mean, if you, you look at the
chart right and you can see it, it kind of flattens off in terms
of how many pounds they've addedto their their total
inventories, if you like. So that dynamic with trading at
a discount, training to premium kind of guides it's buying
(03:17):
action. So now prior to this raise, like
if we look at Friday's close on a per share, per share basis was
17 bucks and four cents, they last traded at 1698.
So really close like we're we'rewe're talking, you know a couple
decimals of a percent and it hadbeen closer to 10% not too long
(03:41):
ago. So it had been a while since
they'd got that close and we knew the company had been
itching to do a raise although. The company?
Well, Sprott. It is a company of sorts, right?
The the management team of the trust.
Yeah, and. Sporting Ku Klux fees, a lot of
fees on this this vehicle. Yeah, exactly.
(04:03):
So they needed to back in May like quell the sort of fees in
the market that they were going to sell pounds because that had
been pressing the market down been a bit of an overhang if you
like. And we thought that first, if
you like had been quenched by doing this May raising
25,000,000 bucks meant they had over 30 which would at kind of
(04:24):
current rates funded for a bit over a year.
And that was done pretty impressively because that was
done at a 9% premium. So they were trading at a steep
discount to NIV and you can't raise at a discount because it's
dilutive and yadda, yadda, yadda.
So they. Don't I think it's explicitly
like a rule of this trust is, you know, there there can be no,
(04:45):
no buying of pounds unless it trades above NAB.
So this money had to come into that vehicle above NAB I
believe. And they got it done, which was,
yeah, it, it, it was well done on their part.
It, it like relaxed the market, if you like.
We didn't seem the the same kickup that we we saw today, which
is kind of interesting. But it meant they could finance
(05:05):
themselves for for a while and they wouldn't have to sell these
pounds. And I mean.
Well, think of the rationale, right?
Why do you like, why are hedge funds or whatever tipping in to
buy spot above NAV doesn't quitemake a lot of sense when there's
like there's a fair bit of carrying costs associated
withholding holding spot like all of the fees that go go at
this process. Why are you willing to pay above
(05:26):
NAV? What's your actual position
here? It's actually in EU equities
which were which had high short interest if you get set in them
and what the flow and implications could be.
Yeah, I mean, and in the wider uranium market it it's bizarre.
There's a lot of bizarre things about uranium and the the
dynamics we currently see with financial players in this
market. It's kind of bizarre to think
(05:47):
that the overhang over a commodity market would be the
thinking that a physical trust like it's a, it's a dynamic that
only is kind of possible right now in uranium.
You're not going to see it in inmany other markets when the
physical trust is big on in the scale of things, right?
It's AUS 5:00-ish billion dollarvehicle.
(06:07):
So yeah, you, you put that asidebecause we thought in May they
raised this money, it's all good.
But now mid June, we see $100 million raising kind of hit the
boards Sunday into Monday and then it's upsized and being done
at a premium to NAV as well as to the last close, a narrow one,
but still a premium. And the uranium spot for us
(06:30):
flew. So it's the biggest run in like
years, like one day jump that we'd seen and it's kind of an
obvious outcome, right when spot, you know, is going to use
this cash to go into the spot market.
The spot market we know is by and large financial players and
traders and these sorts they're trying to get in front of the
train and and buy it before spotcan do it.
(06:52):
So but but. Brought themselves a disciplined
like in buying the pounds they're not going to they're not
going to exercise the yeah, the amount of I suppose I'll
discipline that we saw on in that single day on the in the
spot market on the spot price. So that was.
Hard to be disciplined right because this is a thinly traded
you know you see lots of 100,000lbs here and there a few trades
(07:17):
a week type of thing. Like they they did buying back
in 23 over like a 5 month periodand they bought like 1 1/2 ish
£1,000,000 and that helped drivethe uranium price from 60 ish
bucks a pound up to like 90 bucks a pound.
So completely agree like that they are not the same as like
(07:43):
the traders in the market. They're not as kind of short
termed in a sense. They're they're putting it in a
pile and they kind of think about the way they go about it.
But but that. Money is earmarked 2 by pounds.
Now that 200 million bucks? Yeah, earmarked 2 by pounds.
And yeah, that that gets you excited if you're a trader.
I suppose there's another way oflooking at it.
And to go back to the the narrative framing, the narrative
(08:05):
has quickly flipped from being quite a like a depressive
narrative in the space to like spot is good to buy pounds.
You've got these RFPs, these requests for proposals coming on
the back of the European summer.I know what you're thinking, but
that is what people are saying out there.
You got big tech bullish, supportive of the whole thing.
You've got all these new reactorannouncements from India to the
(08:28):
Czech Republic to all over the world.
You've got the uncertainty around Liberation Day kind of
waning supply still not coming online.
Like you can bend all the facts and and figures and all of a
sudden you've got a awesome narrative to wrap around it and.
Narrative always follows Price, right?
They work in tandem, they work hand in hand and a kind of good
(08:51):
sales pitch goes goes a long wayright.
So all of a sudden spot is trading at a discount because
for for a couple of reasons, they haven't actually issued the
the new shares. So if you're looking on the spot
website, you you'll see that hasn't actually changed just
yet. That'll happen on the 20th of
June and the spot price jumps. So it it looks like they're in
(09:13):
A5 six 7% discount. Already, I think I think that
discount is structural like evenwhen they did the $25 million
placement, they didn't then trade above NAV post doing that
and you know here here again, I don't I don't think you're going
to see. And they're they're always,
always like ish going to trade at a discount structural to your
(09:33):
point because of the fees. Embedded in the yeah, there's,
well, there's certainly been periods in the past historically
when there's enough like retail sentiment that has facilitated a
spot to trade at A at a premium.And that's why they've
accumulated the amount of poundsthat they they have over time.
Yeah, that stopped a while ago. This this upsizing daily
thoughts? Right, A lot of thoughts on
(09:54):
this, right. So if if you're an Instore
investor in the space and you sort of catch wind that they're
going to do like a a decent raising 100 million.
A spot. A spot.
Particularly if you're an Instore who's long uranium
equities, you know, it's on likeit's, it's so on when you catch
wind of this. This was done through through
Canaccord as people would have read.
And you know, the equities are just going to RIP and the
(10:19):
sentiment is going to change if you you catch wind of this.
And you also think, you know, particularly in Australia here
where there's such high short interests currently in the name.
So those come off a little bit. But boss still at 18% plus
Paladin like 1516% short interest there.
There is an opportunity. Here isn't that crazy.
So the uranium juniors like I, Ilook at the equities and they
(10:42):
are undoubtedly like trade as high beta to the uranium spot
price. Explain high beta just real
quick for. Yeah, high beta.
It's just like you know what a 1% move in the in the uranium
spot price, you will get a larger than 1% move on average
in the in the uranium junior equities to the spot price,
right, Not the not the term price, the juniors trade is high
(11:05):
beta to the spot price and the spot price is such a thin
market. So the financial players can
squeeze that spot price by a spot, but they're getting paid
in the equities, right? That's the trade.
That's in fact, the trade was tobe set in the equities before
spot launched that placement. And if you're paying attention,
those equities ripped a day before spot launched that
(11:27):
placement. That news almost certainly, you
know, fizzled out there and drifted out into the, into the,
yeah, the, the financial world and, and funds got set in the
equities and then and then they then they bid like crazy into
the spot placement knowing knowing that you get the the
high beta RIP that comes becausespot prices, yeah, certainly go
(11:48):
higher. This is this is like a textbook
squeeze executed to perfection when you've got high short
interest in those equities. And and it's the difference
between the retail component andthe installs as well that can
beat into big time mechanical and they can really push that.
You know, they they call their good friends at Canical and they
say, can we get a good bit of this and hence upsize from 100
million to 200 million. The thing just flies.
(12:08):
Well, that's that's. The interesting thing right this
this the winners of this trade are the are the instos, not not
retail, but those instos. They need to to like to lock in
their lock in their wins. What do they need?
They need to do? They need to sell eventually
their equities and and they probably need retail mania to
return to to to lock in those gains.
(12:28):
So I, you know, I think if, if retail kind of wraps around this
and gets excited and buys EU equities like that's yeah,
you're looking in the games for the guys that got set on the
race. The the retail guys, we still
feel like they've had an awesomewin and might be back to to
previous levels for for some. But if you look back over the
last year, most of these most ofthese charts have gone up into
the right now after or perhaps even less than that after having
(12:52):
a bit of a brutal year before that.
Well, so isn't that kind of curious, right?
Because, you know, you talked toall the positive like market
thematic stuff and the narrativekind of I think gets wrapped
around spot price and spot priceis thin and manipulated, yada
yada. But without.
Spot without spot without spot, Yeah.
Where is where is like where? Where's uranium right now?
(13:13):
Where's the uranium? Like I said, it's a bizarre
market. It's it's a truly wacky and kind
of perplexing market. And so much of this news just
relies on a physical trust whichis not related to the the
fundamentals. Like it tries to piggyback off
the fundamentals but it doesn't.So what do you, what do you
(13:36):
think of this $200 million? What's going to what's going to
like impact is this going to have in the spot market?
I. Mean just looking at what you
can kind of buy with it is interesting.
Like you can get about two and ahalf million pounds ish.
Like we said before, they've gota bit over 66 for for context.
And if you look at 2024 in the spot market, we saw a bit under
£50 million trade. Now this is the spot market
(13:58):
again. So this could be the same pounds
gone back and forth a couple times between various traders
and and the like. So it's, it's hard to get a, a
grasp. But yeah, we we saw the spot
price jump up. So it'll be interesting to see
over what time horizon spot use the cash and and invest it if we
see sort of bigger volumes startto go through.
(14:20):
But yeah, like, like we sort of said that that earlier time
frame in 2023, the numbers we gave to what pushed the spot
price up quite dramatically. Yeah, I'm sure that's what a lot
of brokers were kind of pushed to now and say, hey, look what
happened last time, get on board.
Here's a good trading opportunity.
But I don't know how you can with any real confidence wrap
(14:42):
numbers around it. Like, yeah, you've got a a
buyer, a buyer who looks by all accounts like they they will go
and buy pounds. But people that make predictions
of it's going to be here by the end of the year kind of.
I scratched my head. We what we saw are similar sort
of thing play out like not all that long ago, to be fair, Like
(15:02):
Remember, Remember the start of 2024 and uranium was flying and
you know, spot was buying poundsand and then all of the hype
kind of fizzled out over. It's short term stuff, right?
Well, that's because that's because the real demand has
taken longer. Things take time, right?
This is this is financial demandthat's yeah, moving, moving in
(15:23):
the traded spot market that thatthat gets the equities to
respond pretty sharply. And you know, people are making
very handsome like profits out of this trade.
Is it is it a true reflection oflike future earnings growth?
That's the question mark. Yeah, Yeah.
I mean, and you'd ask a sort of person that makes the pitch
saying look at what happened last time, what happened after
(15:47):
spots stopped by the pounds, it just peeled off.
So it depends what your time horizon is when when you look at
this. And your point on the, the
earnings potential of the companies is really interesting
because if you look at some of the names in the ISX now and you
try and back out a uranium priceand you use kind of middle of
the, the, the sort of Rd. numbers on mining assumptions
(16:09):
and these sorts of things. And you, you let the, the
sensitivity be or the, the variable that moves be the
uranium price. Like I feel like you're, you're
getting a, a price backed out that's well over 100 bucks.
Like it's you, you look at the market caps of some of these
businesses and the mine lives that they've produced and the
(16:30):
mining costs that they've kind of indicated to and all these
sorts of things. And you try and back solve like,
yeah, you might have expectations on them perhaps
being able to extend the mine life or find new pockets and
yeah, at a higher grade and all these sorts of things.
But there still needs to be a bit a bit of back solving to be
done or you're just you. Still use DCFS to value these
(16:52):
companies, right you're living. In the multiples multiples.
You're living in the old world. We don't need those things
anymore. They're ancient.
Yeah no, I see what you mean. And like, and that's the yeah
the overarching question especially like if if a lot of
the price actually is different by short squeeze.
That's not, not a reflection of fundamentals, although like, you
know, yeah, we we get a second hand that the the term pricing
(17:14):
is, you know, is, is, is is notching up like pretty steadily
at a decent, decent tick. So like that's the that's the
reflection of of earnings growthis that's what's.
Turning to some term price. But the yeah, this, this the at
the end of the day, these equities move to the tune spot.
Yeah. And spot.
Spot is an influencing spot. Yeah, if you're in it for the
(17:36):
long term, keep a keep a good eye on what those sort of term
contract numbers. You start to see anything kind
of come out after the European summer like we always hear,
mate. Which European summer this this
one coming up, or the one beforethat, or the one before that?
I'll get too skeptical. Yeah, OK mate.
Well, talking about uranium has got me thinking about how mines
(17:57):
are powered, and most importantly, how they should be
powered. So you're thinking about how
mines are powered today and how they might be powered in the
future. Maybe I am and every time I end
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Cross boundary energy. OK, tell me why.
They are the first name that comes to mind when I think of de
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(18:20):
rely on solutions that can save the miners cash.
OK, mate, you, you've got me interested.
It's it's pretty amazing as well.
So not just power supply, we're talking fully financed turnkey
energy solutions. Zero CapEx, JD, zero CapEx,
cheaper OpEx, less stress while you build your project.
Where do I sign? What about?
(18:42):
What about? Does it matter where my project
is? It does not matter.
It doesn't matter. It doesn't matter, mate.
You could be in, you'd be in WA if you if you wanted to, but you
could also be in Madagascar, youcould be in Sierra Leone.
It it truly does not matter. Cross boundary energy will go
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after a hybrid power station that they risky project and
saves you money. Sounds like I should just call
(19:03):
cross boundary energy. Reliable, affordable, clean
energy customized for your mind.Go cross boundary energy all
righty. Be honest, New world resources.
We've got to talk a bit about these ones, mate.
There's been some drama. There has been indeed.
I'm, I'm, I've been, I've been getting in the weeds a little
bit the last few minutes. M and AI thought you might have
been mate. May 21st New World enters A
(19:25):
scheme with Central Asian Metals, who will also call CAML
Now that came out with an agreement for CMACAML Camel
Camel Mighty Camel to buy New World at $0.05 a share, giving
them a a rough valuation at $185million.
I think that things like a 96% premium to to last.
(19:48):
They've been trading in the twosbefore.
That big, big, big, big premium,Yeah, great, great outcome for
New World shareholders. And on top of that, New World's
currently in a trading halt right now.
That trading halt references a bump in consideration on its way
for shareholders, those lucky shareholders.
But why the increase? Wasn't it already a giant
premium? They are licking their lips,
(20:10):
right. So we see that announcement and
then we see a change in substantial come out, right
Canterra Capital. So these guys have emerged as a
12% shareholder and they've paidup at a bit over $0.05 a share
on average. They've been, yeah, they've
bought in the high fours and youcan see that the highest price
they've paid so far, 5.1 cents ashare.
Yeah. And and the quick one O 1 on
(20:32):
Quintero, these are Canada basedprivate equity groups.
So they've got a mandate for critical minerals projects as
well as kind of related infrastructure.
They previously actually wrappedup Southwest Critical Minerals,
and this one's particularly interesting because they were
the owners of the Pumpkin Hollowproject in Nevada as well,
Copper project, US $128 million.So it's a very similar style of
(20:57):
project in a sense, you know? I can try and piece together
what, what's going on here and what's happened.
So Camel, Camel has a matching, right.
So if Quintera was buying stock on on market all the way up to
5.1 cents, then maybe Quintera'sprepared to, to lob a, a bid for
100% of, of New World themselvesfor say call it 5.2 cents or
(21:17):
higher. You can't make a takeover offer
at a lower price than you've bought shares in the last four
months. So you know when the offer is
going to be, you know, north of north of that last price they've
paid. And Camel, they've signed this
scheme implementation deed with that matching right now.
I don't actually think Quintero has submitted a bid yet.
I, I think the flagged increase in consideration from camel is
(21:41):
actually just pre emptive. They're, they're trying to, you
know, get on top of this before they, before there's actually a
competing bid in place. But this is, this is still
awesome. You know, there's live bidding
effectively happening out here in the open, all to the benefit
of the New World shareholders. That 12% stake to Quintera right
now is very strategic. I hear that they're trying to
(22:02):
get their hands on 19.9% and thefact that Quintera is freely
buying shares on market here tells me a very important piece
of information. JD.
What's that mate? I want to draw your attention
first to this this quote in the New World announcement, the day
the deal with Camel was announced, it says the Board of
(22:23):
New World has entered into this transaction following the
completion of a highly competitive financing and
strategic partnering process during which the company
attracted strong interest from multiple Tier 1 counterparties,
including precious metal streamers, specialist mine
financiers and strategic partners.
Notwithstanding the compelling proposals received as part of
that process, the Board, in consultation with its advisers
carefully assessed the valuation, funding, timing and
(22:45):
execution certainty of the transaction compared with all
available alternatives. Now that there tells me two
things. One, a process has clearly been
run. 2, the word from that wording, I get the impression
the bid from Camel wasn't the highest bid in that process.
They're they're saying they weighed up all of these
different things. So to me, it comes across as the
(23:06):
most certain, like the most execution certainty, but I don't
think it was the highest price that they received.
And, and so now, now we know that New World ran a competitive
process because they, they tell,they tell that, well, when you
run a process, what you do is you have the participants in
that process that want access toyour data room, They've got to
sign a confidentiality agreementor ACA.
(23:27):
Those CAS include customary standstill agreements.
If you're a public company and the standstill agreement
prevents the, you know, the the participant from buying any
stock in New World on market fora period of time, you know, call
it 12 to 24 months is is kind ofstandard, but you, you know that
buy any more shares, it stands still.
You're stuck at whatever you're on at that point in time.
(23:50):
And you can see in the scheme implementation date that Camel
executed that was signed on the 20th of December.
So that process is being run CA sign 20th of December.
It's a Christmas present. Nasty DD over the Christmas
period, but but OK, so, so this,you know, that's, that's when
the strategic process is being run.
We can introduce that. So if Quintero is freely buying
(24:11):
stock on market, what that tellsme is that they weren't a part
of that formal process. They didn't sign ACA.
Importantly, there's no standstill preventing them from
buying stock right now. They're buying stock without
having done due diligence. They haven't been in the data
room. They're coming in hot.
This is a This is a rare sight. That's that's pretty
(24:31):
fascinating. And we know that they they're a
relatively recent PE group and the second fund hadn't even been
finalized yet. Obviously that they had their
first fund which was finalized late 23, but they hadn't put the
final touches on fund 2, which is what they have bought the
stock in at that date yet either.
(24:51):
So it's. So interesting, right?
Like you've got, I mean, they're, they're, they're
prepared to write this cheque well, for at least 2019.9% not
having done, not having had access to the data.
And maybe they've got synergies.And so that's letting them kind
of bid up confidently on the publicly available information.
But, and already you're getting the, the camel kind of just
lifting consideration in preparation to be like, hey,
(25:13):
hey, we're gonna wait. This is ours, not yours.
Go away. So I, I just, I hope it gets
juicy. I hope it gets interesting.
I hope shareholders just have a have a tremendous win here
because yeah, that like that's this stuff just gets gets
excited. It's awesome, Yeah.
I think there's more to be kind of said, maybe even like a whole
episode needs to be had on mining private equity.
I know we've sort of spoken about it a bunch, but yeah, not
(25:35):
totally convinced it's the rightapproach.
But we see, we, we do keep seeing a lot of these funds pop
up, particularly like North American oriented because the
endowments and stuff understand private equity, not mining, but
they understand private equity and it's something they can
allocate to. So, yeah, these guys, like I
said, just wrapped up another US$1 billion.
They they came from another mining private equity Canadian
(25:59):
group as well and started this just recently.
So yeah, there's something more to be said there, as well as the
fact that the copper names are just disappearing off the ASX.
The juniors in particular, yeah.There's not that many seniors
either. So yeah, Black Underbeard
Xanadu, who we've spoken about recently, New world here.
(26:21):
This breaks last year. We a bunch of them.
It's. And yet the the there's there's
new entrants coming on too. I don't know if you've noticed
it. Marry Marker debuted.
Yeah. And.
They they did a raising too and obviously we saw capstone coming
list a bit down here. Well marry marker might be
disappearing soon too. See, I think it's attack over
targets. Yeah, I think there's a a bit to
(26:42):
be seen there. Yeah.
All right, mate. Underground mining commodities
like copper, zinc, silver, all vital for our future.
That's the type of project in this case at New World that is
only made possible by ground support.
And when I think ground support,I think Sandvik ground support.
And I want to share some more wise words from the man who has
(27:03):
LED Sandvik ground support in nearly 20 years.
Here is Derek heard money minershad.
Four years in Mount Isa with work, it was that company called
A and I back then I started as the R&D engineer, yeah, back
then. This is what ultimately became
Sandy Ground Support. Yeah, correct.
So, yeah, the A and I business got bought by the DSI business
and the that that time the DSI business was Divvy DAG and
(27:26):
that's DVDAC Systems International.
That's what the DSI. Yeah, exactly What a.
Name. So DSI actually goes back to
like the the mid 1800s, yeah. Absolutely back.
In German firm as well. Exactly strong lineage.
Yeah, so like 1865 I think it. Was and so you studied
engineering and mechanical engineering before.
Correct. So I'm a mechanical engineer, so
(27:47):
through Newcastle University, but pretty quickly realized
there's not too many people thatstay true engineers and went off
and did a business degree as well.
So I had a career through the business that started as an RNA
engineer, moved into a sales role and then sort of a bigger
sales role and went to Mount Isaand lived up there for four
years and managed that region. And then came back and started
(28:08):
managing the export business andthen sort of the national
business, then became sort of what they called a business unit
manager and then progressed intothe CEO role.
Go Sandvik grant support. All right mate.
Last bit of last bit of chatter for today.
This is an interesting one. Tell me, Cat.
Tell me. Tell me what you tell me what
you uncovered. So black cat have come up with
(28:31):
these strategy names in past andthey crack me up.
I I love them no knock on them they're they're hilarious, but
they are, you know, to the pointthey get your attention.
So the previous one they had wasall gold sooner.
It's effective, you know, there's no confusion about it.
You know what they want, but they came out with an
announcement earlier this week and they've added to it.
(28:54):
So more gold sooner to be held longer is the new strategy name.
And I don't think you need a marketing professional to tell
you that doesn't roll off the tongue as perhaps easy as it
could have, but. That's no, no man, I reckon you
couldn't have asked that deputy for a more succinct like like
more goals to be held long. I get your strategy in six
(29:15):
words. Like, yeah, that's it.
They vowed it. Don't have to read it as little
words as possible. So credit to them for that.
And we're talking about it. We're talking about it because
the strategy itself is interesting, so.
What are they doing? Goldie's wanting to hold more of
their liquid assets in the form of gold bullion as opposed to
(29:36):
cash and. That's what Blackout's saying.
They're they're they're came to,Yeah.
And they've already got $24 million worth of bullion.
Yeah. They want to keep as much
bullion as as possible and only sell what they need to.
Yeah. And in their case, they've sort
of given it a, a buffer like a a#20 million equivalent.
But I think it's worth discussing.
I think it's a really interesting strategy that that
(29:57):
they're doing and there's a few different features of it that
need to be discussed, right. So there's something to be said
for the taps tax implications ofthis because gold, when you're a
gold miner that you haven't yet sold is unrealized revenue,
right? Yeah, yeah, yeah.
In many jurisdictions, income tax is only triggered when the
(30:19):
revenue is realized. In Australia, that unsold gold
is inventory, not not revenue onyour balance sheet.
Therefore, no assessable income is is recognized until that sale
actually occurs, which means a natural deferral of your Income
Tax Act that has an impact on your on your cash flow.
Metrics as well. So the gold that stays on the
minus balance sheet, here's a bit of a catch though.
(30:43):
It'll be valued typically at theat the lower of cost price and
market value. And because the, the market
value of gold typically tends togo up over time, in reality,
it's it's held on your balance sheet at cost price.
And so in a rising gold market like these miners that choose to
do this from time to time, they will avoid recognizing a, a
(31:04):
high, a high book profit on that.
They just keep keep it on their balance sheet of cost.
One for the accountants out there.
I don't mind it though. Like I don't mind the strategy.
I don't, I don't mind it at all,right.
I, I think if you're of the philosophy that that gold is
money, which clearly a lot of your investor base will be kind
(31:26):
of partial to given you're investing in a gold mining
company. And I think it's too much of A
stretch to, to think that then it, it makes perfect sense.
It's kind of interesting yet, yet your market in, in dollars,
but you kind of got a market in something right.
But I it, it, it makes total sense if if you are wanting to
(31:47):
compete against inflation and all these sorts of things.
I kind of like it. The market would hate you for
just like accrue like building up cash only on your balance
sheet and having no plans to to distribute that to shareholders
or no way to reinvest it or organically.
Like, I do think, you know, the market would prefer to see
reinvestment for growth with theproceeds of the profits of a
(32:10):
Gold Bond for sure, or or distributions to shareholders
for sure. But you've got something
leftover at the end of that and you decide to keep it in gold or
you've got your available liquidity in gold.
I don't hate it. I don't think the market is
going to love it or value it in general, though.
And there's a couple of like, there's one big precedent I can
point to that it's a very peculiar case and maybe not the
(32:32):
best precedent to talk about. JD, please, you know, do you
know who I'm talking about? I do.
One of our favorite companies. Yeah, it's, it's actually two
companies Tribune and Rand. So these are the JV partners E
Kendana joint venture to, to Evolution mining previously was
it was Northern star of the JV partners.
(32:53):
Now, now Tribune if you look at their books, they equity account
Rand. So all you've got to look at is
the inventories on the balance sheet of of of Tribune as it's
31 December in their accounts. You can you can see gold on hand
at cost 177 million of gold bullion, but it's valued at cost
(33:17):
JD and neither Tribune nor Rand will tell you anywhere how many
ounces they actually have bullion.
You you're just left with that number trying to figure it out.
But if you do your homework and Perth.
Means it's just their fault. Mate, if you.
If you can't trust it. I haven't done this homework
myself, but I trust the people that that did do this homework.
(33:39):
Go through the history and you can deduce what's been produced
and what's been sold over time and you can back out.
The Tribune and Rand collectively have about 130,000
ounces of gold in the accounts. At the Perth Mint, 130,000
ounces of gold, while it might be be valued on the books at
$177 million, is actually worth $680 million a current process.
(34:05):
That's a staggering amount of ofbullion and I I'm pretty sure
that that this is the single largest account of gold on hand
at the Perth Mint. Crazy.
And what gets weirder, mate, if you just add the market caps of
Rand and Tribune together, you'll get $370 million.
Now that is, that's like half the value of the, the gold alone
(34:28):
that they have on hand, not least of which they still
clearly have an, an economic interest in a joint venture that
is still producing a lot more gold that should be worth a fair
bit of money. So this is like as negative EV
as they get. Granted, you can't quite figure
out when you're going to get paid here because because
there's, you know, kind of a, a complicating share shareholder
(34:50):
dynamic and structure and a few obstacles in the way to A, to A,
to an outcome if you were an activist.
One or two. One or two, One or two.
Fascinating example nonetheless,but really it's a ballsy
strategy. Kind of admire the strategy to
to do it and to not really give a crap about what people think
and just just a cream like gold.I hope the Mint still has that
(35:10):
gold. Yeah, I'd, I'd probably
diversify the mints that I hold the the the bars with it's a
lot. Of faith in the Mint.
Is a tremendous amount of faith in the in the Perth Mint.
So, yeah, I, I think it's reallyinteresting if we go back to the
the strategy again, looking at like parallels, we've seen this
in uranium, but it's kind of weird.
(35:30):
Like you don't see it in any other and it just wouldn't
really be OK in any other commodities.
So yeah. Why is that?
It's because it's because like obviously the dollar is clearly.
Yeah, and. The value that arose over time
and gold is seen as like a a clear and proven way of
circumnavigating that, whereas other commodities aren't as
(35:51):
inflation resistant. Yeah.
I mean, a lot of people point tocommodities being the good
inflation hedge, but not all commodities are equal, right?
So yeah, it wouldn't be chuffed if like a zinc producer is going
to start doing this, but gold, maybe it's OK given the many
thousand year track record. So yeah, I think they could have
put a slightly better chart thanjust going back 20 years to to
prove their point. But I think the the strategy is
(36:14):
interesting nevertheless and I don't mind it.
What? Do you think money minus let us
know Ford gold or what cash or none of you above.
Or what else? All righty mate.
Let's thank our wicked partners for today's episode.
Mineral Mining Services, Grounded Sand, Vic Ground
Support, Adriel and Boss Boundary Energy, Buduru.
Buduru. Now remember, I'm an idiot.
(36:38):
JD is an idiot. If you thought any of this was
anything other than entertainment, you're an idiot
and you need to read out a disclaimer.
If you're an insto investor in the space and you sort of catch
wind that they're going to do like a decent raise 100.
Million for spot for spot. You know it's on like it's, it's
so on when you catch wind that there's, you know, the equities
are just going to RIP you dogs.
(00:25):
Uranium, JD uranium, it just hadits biggest one day spike in
years and it all started with spotlighting the fuse.
A surprise $100 million raise for the financial reactor has
been upsized to $200 million andit sent the uranium equities
flying. Why we dive into this?
Plus, copper juniors get even hotter.
The takeover of newer resources is getting competitive.
(00:46):
Please be a bidding war and should gold companies hold the
gold or generate cash? We're going to share some
thoughts on this. Let's dive in JD, what the hell
is going on in the uranium market, mate?
Let's. RIP in, we've got some awesome
stuff to talk about. So uranium first up, I'm sure
that's what a lot of people are keen to here.
So sort of seeing news come out over late Sunday and then into
(01:07):
early this week all centered around Spot, the Mighty spot,
spot Physical, Uranium Trust. So that is the unit that just
holds £66 million plus of uranium.
They get cash, they buy more. So like you said, 100 million US
raising upsize to 200 and we're going to talk about that dynamic
(01:28):
a bit also very interesting. And you mentioned the word sort
of surprise raising there. It was right because they raised
money it over $25 million just in May.
So a bit going on there. And and obviously the the stocks
just rocketed for Monday, Tuesday like deep yellow on
Monday was up 20% plus Boss 16 and Paladin about 15% all in on
(01:53):
the Monday that was. And then if you look at the
Sprott Uranium Miners ETF, so the basket of all these names
that trades in the North American markets, that was up
about 7%. So spot itself has settled a
bit. It it jumped up from kind of 17
ish to to about 18 bucks and then has come back down to the
(02:14):
low seventeens. But yeah, it's been super
volatile the last few months. We've had that sort of narrative
of or maybe spot has to sell some pounds to finance itself.
That's sort of washed away and it's just, it's just turned like
that, right? It's turned probably because of
some opportunism from the financial sector.
(02:35):
JD, let's start with Spot itself, because this is the the
trust of the vehicle. It's a Sprott unit trust, which
is effectively accumulating pounds of uranium.
Yeah, typically this this vehicle can only add more pounds
when it trades above NAV, which it hasn't done in quite some
time. However, this placement and the
(02:57):
last one have have been able to get over the line.
Yeah. I mean, if you, you look at the
chart right and you can see it, it kind of flattens off in terms
of how many pounds they've addedto their their total
inventories, if you like. So that dynamic with trading at
a discount, training to premium kind of guides it's buying
(03:17):
action. So now prior to this raise, like
if we look at Friday's close on a per share, per share basis was
17 bucks and four cents, they last traded at 1698.
So really close like we're we'rewe're talking, you know a couple
decimals of a percent and it hadbeen closer to 10% not too long
(03:41):
ago. So it had been a while since
they'd got that close and we knew the company had been
itching to do a raise although. The company?
Well, Sprott. It is a company of sorts, right?
The the management team of the trust.
Yeah, and. Sporting Ku Klux fees, a lot of
fees on this this vehicle. Yeah, exactly.
(04:03):
So they needed to back in May like quell the sort of fees in
the market that they were going to sell pounds because that had
been pressing the market down been a bit of an overhang if you
like. And we thought that first, if
you like had been quenched by doing this May raising
25,000,000 bucks meant they had over 30 which would at kind of
(04:24):
current rates funded for a bit over a year.
And that was done pretty impressively because that was
done at a 9% premium. So they were trading at a steep
discount to NIV and you can't raise at a discount because it's
dilutive and yadda, yadda, yadda.
So they. Don't I think it's explicitly
like a rule of this trust is, you know, there there can be no,
(04:45):
no buying of pounds unless it trades above NAB.
So this money had to come into that vehicle above NAB I
believe. And they got it done, which was,
yeah, it, it, it was well done on their part.
It, it like relaxed the market, if you like.
We didn't seem the the same kickup that we we saw today, which
is kind of interesting. But it meant they could finance
(05:05):
themselves for for a while and they wouldn't have to sell these
pounds. And I mean.
Well, think of the rationale, right?
Why do you like, why are hedge funds or whatever tipping in to
buy spot above NAV doesn't quitemake a lot of sense when there's
like there's a fair bit of carrying costs associated
withholding holding spot like all of the fees that go go at
this process. Why are you willing to pay above
(05:26):
NAV? What's your actual position
here? It's actually in EU equities
which were which had high short interest if you get set in them
and what the flow and implications could be.
Yeah, I mean, and in the wider uranium market it it's bizarre.
There's a lot of bizarre things about uranium and the the
dynamics we currently see with financial players in this
market. It's kind of bizarre to think
(05:47):
that the overhang over a commodity market would be the
thinking that a physical trust like it's a, it's a dynamic that
only is kind of possible right now in uranium.
You're not going to see it in inmany other markets when the
physical trust is big on in the scale of things, right?
It's AUS 5:00-ish billion dollarvehicle.
(06:07):
So yeah, you, you put that asidebecause we thought in May they
raised this money, it's all good.
But now mid June, we see $100 million raising kind of hit the
boards Sunday into Monday and then it's upsized and being done
at a premium to NAV as well as to the last close, a narrow one,
but still a premium. And the uranium spot for us
(06:30):
flew. So it's the biggest run in like
years, like one day jump that we'd seen and it's kind of an
obvious outcome, right when spot, you know, is going to use
this cash to go into the spot market.
The spot market we know is by and large financial players and
traders and these sorts they're trying to get in front of the
train and and buy it before spotcan do it.
(06:52):
So but but. Brought themselves a disciplined
like in buying the pounds they're not going to they're not
going to exercise the yeah, the amount of I suppose I'll
discipline that we saw on in that single day on the in the
spot market on the spot price. So that was.
Hard to be disciplined right because this is a thinly traded
you know you see lots of 100,000lbs here and there a few trades
(07:17):
a week type of thing. Like they they did buying back
in 23 over like a 5 month periodand they bought like 1 1/2 ish
£1,000,000 and that helped drivethe uranium price from 60 ish
bucks a pound up to like 90 bucks a pound.
So completely agree like that they are not the same as like
(07:43):
the traders in the market. They're not as kind of short
termed in a sense. They're they're putting it in a
pile and they kind of think about the way they go about it.
But but that. Money is earmarked 2 by pounds.
Now that 200 million bucks? Yeah, earmarked 2 by pounds.
And yeah, that that gets you excited if you're a trader.
I suppose there's another way oflooking at it.
And to go back to the the narrative framing, the narrative
(08:05):
has quickly flipped from being quite a like a depressive
narrative in the space to like spot is good to buy pounds.
You've got these RFPs, these requests for proposals coming on
the back of the European summer.I know what you're thinking, but
that is what people are saying out there.
You got big tech bullish, supportive of the whole thing.
You've got all these new reactorannouncements from India to the
(08:28):
Czech Republic to all over the world.
You've got the uncertainty around Liberation Day kind of
waning supply still not coming online.
Like you can bend all the facts and and figures and all of a
sudden you've got a awesome narrative to wrap around it and.
Narrative always follows Price, right?
They work in tandem, they work hand in hand and a kind of good
(08:51):
sales pitch goes goes a long wayright.
So all of a sudden spot is trading at a discount because
for for a couple of reasons, they haven't actually issued the
the new shares. So if you're looking on the spot
website, you you'll see that hasn't actually changed just
yet. That'll happen on the 20th of
June and the spot price jumps. So it it looks like they're in
(09:13):
A5 six 7% discount. Already, I think I think that
discount is structural like evenwhen they did the $25 million
placement, they didn't then trade above NAV post doing that
and you know here here again, I don't I don't think you're going
to see. And they're they're always,
always like ish going to trade at a discount structural to your
(09:33):
point because of the fees. Embedded in the yeah, there's,
well, there's certainly been periods in the past historically
when there's enough like retail sentiment that has facilitated a
spot to trade at A at a premium.And that's why they've
accumulated the amount of poundsthat they they have over time.
Yeah, that stopped a while ago. This this upsizing daily
thoughts? Right, A lot of thoughts on
(09:54):
this, right. So if if you're an Instore
investor in the space and you sort of catch wind that they're
going to do like a a decent raising 100 million.
A spot. A spot.
Particularly if you're an Instore who's long uranium
equities, you know, it's on likeit's, it's so on when you catch
wind of this. This was done through through
Canaccord as people would have read.
And you know, the equities are just going to RIP and the
(10:19):
sentiment is going to change if you you catch wind of this.
And you also think, you know, particularly in Australia here
where there's such high short interests currently in the name.
So those come off a little bit. But boss still at 18% plus
Paladin like 1516% short interest there.
There is an opportunity. Here isn't that crazy.
So the uranium juniors like I, Ilook at the equities and they
(10:42):
are undoubtedly like trade as high beta to the uranium spot
price. Explain high beta just real
quick for. Yeah, high beta.
It's just like you know what a 1% move in the in the uranium
spot price, you will get a larger than 1% move on average
in the in the uranium junior equities to the spot price,
right, Not the not the term price, the juniors trade is high
(11:05):
beta to the spot price and the spot price is such a thin
market. So the financial players can
squeeze that spot price by a spot, but they're getting paid
in the equities, right? That's the trade.
That's in fact, the trade was tobe set in the equities before
spot launched that placement. And if you're paying attention,
those equities ripped a day before spot launched that
(11:27):
placement. That news almost certainly, you
know, fizzled out there and drifted out into the, into the,
yeah, the, the financial world and, and funds got set in the
equities and then and then they then they bid like crazy into
the spot placement knowing knowing that you get the the
high beta RIP that comes becausespot prices, yeah, certainly go
(11:48):
higher. This is this is like a textbook
squeeze executed to perfection when you've got high short
interest in those equities. And and it's the difference
between the retail component andthe installs as well that can
beat into big time mechanical and they can really push that.
You know, they they call their good friends at Canical and they
say, can we get a good bit of this and hence upsize from 100
million to 200 million. The thing just flies.
(12:08):
Well, that's that's. The interesting thing right this
this the winners of this trade are the are the instos, not not
retail, but those instos. They need to to like to lock in
their lock in their wins. What do they need?
They need to do? They need to sell eventually
their equities and and they probably need retail mania to
return to to to lock in those gains.
(12:28):
So I, you know, I think if, if retail kind of wraps around this
and gets excited and buys EU equities like that's yeah,
you're looking in the games for the guys that got set on the
race. The the retail guys, we still
feel like they've had an awesomewin and might be back to to
previous levels for for some. But if you look back over the
last year, most of these most ofthese charts have gone up into
the right now after or perhaps even less than that after having
(12:52):
a bit of a brutal year before that.
Well, so isn't that kind of curious, right?
Because, you know, you talked toall the positive like market
thematic stuff and the narrativekind of I think gets wrapped
around spot price and spot priceis thin and manipulated, yada
yada. But without.
Spot without spot without spot, Yeah.
Where is where is like where? Where's uranium right now?
(13:13):
Where's the uranium? Like I said, it's a bizarre
market. It's it's a truly wacky and kind
of perplexing market. And so much of this news just
relies on a physical trust whichis not related to the the
fundamentals. Like it tries to piggyback off
the fundamentals but it doesn't.So what do you, what do you
(13:36):
think of this $200 million? What's going to what's going to
like impact is this going to have in the spot market?
I. Mean just looking at what you
can kind of buy with it is interesting.
Like you can get about two and ahalf million pounds ish.
Like we said before, they've gota bit over 66 for for context.
And if you look at 2024 in the spot market, we saw a bit under
£50 million trade. Now this is the spot market
(13:58):
again. So this could be the same pounds
gone back and forth a couple times between various traders
and and the like. So it's, it's hard to get a, a
grasp. But yeah, we we saw the spot
price jump up. So it'll be interesting to see
over what time horizon spot use the cash and and invest it if we
see sort of bigger volumes startto go through.
(14:20):
But yeah, like, like we sort of said that that earlier time
frame in 2023, the numbers we gave to what pushed the spot
price up quite dramatically. Yeah, I'm sure that's what a lot
of brokers were kind of pushed to now and say, hey, look what
happened last time, get on board.
Here's a good trading opportunity.
But I don't know how you can with any real confidence wrap
(14:42):
numbers around it. Like, yeah, you've got a a
buyer, a buyer who looks by all accounts like they they will go
and buy pounds. But people that make predictions
of it's going to be here by the end of the year kind of.
I scratched my head. We what we saw are similar sort
of thing play out like not all that long ago, to be fair, Like
(15:02):
Remember, Remember the start of 2024 and uranium was flying and
you know, spot was buying poundsand and then all of the hype
kind of fizzled out over. It's short term stuff, right?
Well, that's because that's because the real demand has
taken longer. Things take time, right?
This is this is financial demandthat's yeah, moving, moving in
(15:23):
the traded spot market that thatthat gets the equities to
respond pretty sharply. And you know, people are making
very handsome like profits out of this trade.
Is it is it a true reflection oflike future earnings growth?
That's the question mark. Yeah, Yeah.
I mean, and you'd ask a sort of person that makes the pitch
saying look at what happened last time, what happened after
(15:47):
spots stopped by the pounds, it just peeled off.
So it depends what your time horizon is when when you look at
this. And your point on the, the
earnings potential of the companies is really interesting
because if you look at some of the names in the ISX now and you
try and back out a uranium priceand you use kind of middle of
the, the, the sort of Rd. numbers on mining assumptions
(16:09):
and these sorts of things. And you, you let the, the
sensitivity be or the, the variable that moves be the
uranium price. Like I feel like you're, you're
getting a, a price backed out that's well over 100 bucks.
Like it's you, you look at the market caps of some of these
businesses and the mine lives that they've produced and the
(16:30):
mining costs that they've kind of indicated to and all these
sorts of things. And you try and back solve like,
yeah, you might have expectations on them perhaps
being able to extend the mine life or find new pockets and
yeah, at a higher grade and all these sorts of things.
But there still needs to be a bit a bit of back solving to be
done or you're just you. Still use DCFS to value these
(16:52):
companies, right you're living. In the multiples multiples.
You're living in the old world. We don't need those things
anymore. They're ancient.
Yeah no, I see what you mean. And like, and that's the yeah
the overarching question especially like if if a lot of
the price actually is different by short squeeze.
That's not, not a reflection of fundamentals, although like, you
know, yeah, we we get a second hand that the the term pricing
(17:14):
is, you know, is, is, is is notching up like pretty steadily
at a decent, decent tick. So like that's the that's the
reflection of of earnings growthis that's what's.
Turning to some term price. But the yeah, this, this the at
the end of the day, these equities move to the tune spot.
Yeah. And spot.
Spot is an influencing spot. Yeah, if you're in it for the
(17:36):
long term, keep a keep a good eye on what those sort of term
contract numbers. You start to see anything kind
of come out after the European summer like we always hear,
mate. Which European summer this this
one coming up, or the one beforethat, or the one before that?
I'll get too skeptical. Yeah, OK mate.
Well, talking about uranium has got me thinking about how mines
(17:57):
are powered, and most importantly, how they should be
powered. So you're thinking about how
mines are powered today and how they might be powered in the
future. Maybe I am and every time I end
up thinking about cross boundaryenergy.
Cross boundary energy. OK, tell me why.
They are the first name that comes to mind when I think of de
risk financing solutions. JD Hybrid Power stations you can
(18:20):
rely on solutions that can save the miners cash.
OK, mate, you, you've got me interested.
It's it's pretty amazing as well.
So not just power supply, we're talking fully financed turnkey
energy solutions. Zero CapEx, JD, zero CapEx,
cheaper OpEx, less stress while you build your project.
Where do I sign? What about?
(18:42):
What about? Does it matter where my project
is? It does not matter.
It doesn't matter. It doesn't matter, mate.
You could be in, you'd be in WA if you if you wanted to, but you
could also be in Madagascar, youcould be in Sierra Leone.
It it truly does not matter. Cross boundary energy will go
anywhere, all right. Mate I'm I'm on board if you are
after a hybrid power station that they risky project and
saves you money. Sounds like I should just call
(19:03):
cross boundary energy. Reliable, affordable, clean
energy customized for your mind.Go cross boundary energy all
righty. Be honest, New world resources.
We've got to talk a bit about these ones, mate.
There's been some drama. There has been indeed.
I'm, I'm, I've been, I've been getting in the weeds a little
bit the last few minutes. M and AI thought you might have
been mate. May 21st New World enters A
(19:25):
scheme with Central Asian Metals, who will also call CAML
Now that came out with an agreement for CMACAML Camel
Camel Mighty Camel to buy New World at $0.05 a share, giving
them a a rough valuation at $185million.
I think that things like a 96% premium to to last.
(19:48):
They've been trading in the twosbefore.
That big, big, big, big premium,Yeah, great, great outcome for
New World shareholders. And on top of that, New World's
currently in a trading halt right now.
That trading halt references a bump in consideration on its way
for shareholders, those lucky shareholders.
But why the increase? Wasn't it already a giant
premium? They are licking their lips,
(20:10):
right. So we see that announcement and
then we see a change in substantial come out, right
Canterra Capital. So these guys have emerged as a
12% shareholder and they've paidup at a bit over $0.05 a share
on average. They've been, yeah, they've
bought in the high fours and youcan see that the highest price
they've paid so far, 5.1 cents ashare.
Yeah. And and the quick one O 1 on
(20:32):
Quintero, these are Canada basedprivate equity groups.
So they've got a mandate for critical minerals projects as
well as kind of related infrastructure.
They previously actually wrappedup Southwest Critical Minerals,
and this one's particularly interesting because they were
the owners of the Pumpkin Hollowproject in Nevada as well,
Copper project, US $128 million.So it's a very similar style of
(20:57):
project in a sense, you know? I can try and piece together
what, what's going on here and what's happened.
So Camel, Camel has a matching, right.
So if Quintera was buying stock on on market all the way up to
5.1 cents, then maybe Quintera'sprepared to, to lob a, a bid for
100% of, of New World themselvesfor say call it 5.2 cents or
(21:17):
higher. You can't make a takeover offer
at a lower price than you've bought shares in the last four
months. So you know when the offer is
going to be, you know, north of north of that last price they've
paid. And Camel, they've signed this
scheme implementation deed with that matching right now.
I don't actually think Quintero has submitted a bid yet.
I, I think the flagged increase in consideration from camel is
(21:41):
actually just pre emptive. They're, they're trying to, you
know, get on top of this before they, before there's actually a
competing bid in place. But this is, this is still
awesome. You know, there's live bidding
effectively happening out here in the open, all to the benefit
of the New World shareholders. That 12% stake to Quintera right
now is very strategic. I hear that they're trying to
(22:02):
get their hands on 19.9% and thefact that Quintera is freely
buying shares on market here tells me a very important piece
of information. JD.
What's that mate? I want to draw your attention
first to this this quote in the New World announcement, the day
the deal with Camel was announced, it says the Board of
(22:23):
New World has entered into this transaction following the
completion of a highly competitive financing and
strategic partnering process during which the company
attracted strong interest from multiple Tier 1 counterparties,
including precious metal streamers, specialist mine
financiers and strategic partners.
Notwithstanding the compelling proposals received as part of
that process, the Board, in consultation with its advisers
carefully assessed the valuation, funding, timing and
(22:45):
execution certainty of the transaction compared with all
available alternatives. Now that there tells me two
things. One, a process has clearly been
run. 2, the word from that wording, I get the impression
the bid from Camel wasn't the highest bid in that process.
They're they're saying they weighed up all of these
different things. So to me, it comes across as the
(23:06):
most certain, like the most execution certainty, but I don't
think it was the highest price that they received.
And, and so now, now we know that New World ran a competitive
process because they, they tell,they tell that, well, when you
run a process, what you do is you have the participants in
that process that want access toyour data room, They've got to
sign a confidentiality agreementor ACA.
(23:27):
Those CAS include customary standstill agreements.
If you're a public company and the standstill agreement
prevents the, you know, the the participant from buying any
stock in New World on market fora period of time, you know, call
it 12 to 24 months is is kind ofstandard, but you, you know that
buy any more shares, it stands still.
You're stuck at whatever you're on at that point in time.
(23:50):
And you can see in the scheme implementation date that Camel
executed that was signed on the 20th of December.
So that process is being run CA sign 20th of December.
It's a Christmas present. Nasty DD over the Christmas
period, but but OK, so, so this,you know, that's, that's when
the strategic process is being run.
We can introduce that. So if Quintero is freely buying
(24:11):
stock on market, what that tellsme is that they weren't a part
of that formal process. They didn't sign ACA.
Importantly, there's no standstill preventing them from
buying stock right now. They're buying stock without
having done due diligence. They haven't been in the data
room. They're coming in hot.
This is a This is a rare sight. That's that's pretty
(24:31):
fascinating. And we know that they they're a
relatively recent PE group and the second fund hadn't even been
finalized yet. Obviously that they had their
first fund which was finalized late 23, but they hadn't put the
final touches on fund 2, which is what they have bought the
stock in at that date yet either.
(24:51):
So it's. So interesting, right?
Like you've got, I mean, they're, they're, they're
prepared to write this cheque well, for at least 2019.9% not
having done, not having had access to the data.
And maybe they've got synergies.And so that's letting them kind
of bid up confidently on the publicly available information.
But, and already you're getting the, the camel kind of just
lifting consideration in preparation to be like, hey,
(25:13):
hey, we're gonna wait. This is ours, not yours.
Go away. So I, I just, I hope it gets
juicy. I hope it gets interesting.
I hope shareholders just have a have a tremendous win here
because yeah, that like that's this stuff just gets gets
excited. It's awesome, Yeah.
I think there's more to be kind of said, maybe even like a whole
episode needs to be had on mining private equity.
I know we've sort of spoken about it a bunch, but yeah, not
(25:35):
totally convinced it's the rightapproach.
But we see, we, we do keep seeing a lot of these funds pop
up, particularly like North American oriented because the
endowments and stuff understand private equity, not mining, but
they understand private equity and it's something they can
allocate to. So, yeah, these guys, like I
said, just wrapped up another US$1 billion.
They they came from another mining private equity Canadian
(25:59):
group as well and started this just recently.
So yeah, there's something more to be said there, as well as the
fact that the copper names are just disappearing off the ASX.
The juniors in particular, yeah.There's not that many seniors
either. So yeah, Black Underbeard
Xanadu, who we've spoken about recently, New world here.
(26:21):
This breaks last year. We a bunch of them.
It's. And yet the the there's there's
new entrants coming on too. I don't know if you've noticed
it. Marry Marker debuted.
Yeah. And.
They they did a raising too and obviously we saw capstone coming
list a bit down here. Well marry marker might be
disappearing soon too. See, I think it's attack over
targets. Yeah, I think there's a a bit to
(26:42):
be seen there. Yeah.
All right, mate. Underground mining commodities
like copper, zinc, silver, all vital for our future.
That's the type of project in this case at New World that is
only made possible by ground support.
And when I think ground support,I think Sandvik ground support.
And I want to share some more wise words from the man who has
(27:03):
LED Sandvik ground support in nearly 20 years.
Here is Derek heard money minershad.
Four years in Mount Isa with work, it was that company called
A and I back then I started as the R&D engineer, yeah, back
then. This is what ultimately became
Sandy Ground Support. Yeah, correct.
So, yeah, the A and I business got bought by the DSI business
and the that that time the DSI business was Divvy DAG and
(27:26):
that's DVDAC Systems International.
That's what the DSI. Yeah, exactly What a.
Name. So DSI actually goes back to
like the the mid 1800s, yeah. Absolutely back.
In German firm as well. Exactly strong lineage.
Yeah, so like 1865 I think it. Was and so you studied
engineering and mechanical engineering before.
Correct. So I'm a mechanical engineer, so
(27:47):
through Newcastle University, but pretty quickly realized
there's not too many people thatstay true engineers and went off
and did a business degree as well.
So I had a career through the business that started as an RNA
engineer, moved into a sales role and then sort of a bigger
sales role and went to Mount Isaand lived up there for four
years and managed that region. And then came back and started
(28:08):
managing the export business andthen sort of the national
business, then became sort of what they called a business unit
manager and then progressed intothe CEO role.
Go Sandvik grant support. All right mate.
Last bit of last bit of chatter for today.
This is an interesting one. Tell me, Cat.
Tell me. Tell me what you tell me what
you uncovered. So black cat have come up with
(28:31):
these strategy names in past andthey crack me up.
I I love them no knock on them they're they're hilarious, but
they are, you know, to the pointthey get your attention.
So the previous one they had wasall gold sooner.
It's effective, you know, there's no confusion about it.
You know what they want, but they came out with an
announcement earlier this week and they've added to it.
(28:54):
So more gold sooner to be held longer is the new strategy name.
And I don't think you need a marketing professional to tell
you that doesn't roll off the tongue as perhaps easy as it
could have, but. That's no, no man, I reckon you
couldn't have asked that deputy for a more succinct like like
more goals to be held long. I get your strategy in six
(29:15):
words. Like, yeah, that's it.
They vowed it. Don't have to read it as little
words as possible. So credit to them for that.
And we're talking about it. We're talking about it because
the strategy itself is interesting, so.
What are they doing? Goldie's wanting to hold more of
their liquid assets in the form of gold bullion as opposed to
(29:36):
cash and. That's what Blackout's saying.
They're they're they're came to,Yeah.
And they've already got $24 million worth of bullion.
Yeah. They want to keep as much
bullion as as possible and only sell what they need to.
Yeah. And in their case, they've sort
of given it a, a buffer like a a#20 million equivalent.
But I think it's worth discussing.
I think it's a really interesting strategy that that
(29:57):
they're doing and there's a few different features of it that
need to be discussed, right. So there's something to be said
for the taps tax implications ofthis because gold, when you're a
gold miner that you haven't yet sold is unrealized revenue,
right? Yeah, yeah, yeah.
In many jurisdictions, income tax is only triggered when the
(30:19):
revenue is realized. In Australia, that unsold gold
is inventory, not not revenue onyour balance sheet.
Therefore, no assessable income is is recognized until that sale
actually occurs, which means a natural deferral of your Income
Tax Act that has an impact on your on your cash flow.
Metrics as well. So the gold that stays on the
minus balance sheet, here's a bit of a catch though.
(30:43):
It'll be valued typically at theat the lower of cost price and
market value. And because the, the market
value of gold typically tends togo up over time, in reality,
it's it's held on your balance sheet at cost price.
And so in a rising gold market like these miners that choose to
do this from time to time, they will avoid recognizing a, a
(31:04):
high, a high book profit on that.
They just keep keep it on their balance sheet of cost.
One for the accountants out there.
I don't mind it though. Like I don't mind the strategy.
I don't, I don't mind it at all,right.
I, I think if you're of the philosophy that that gold is
money, which clearly a lot of your investor base will be kind
(31:26):
of partial to given you're investing in a gold mining
company. And I think it's too much of A
stretch to, to think that then it, it makes perfect sense.
It's kind of interesting yet, yet your market in, in dollars,
but you kind of got a market in something right.
But I it, it, it makes total sense if if you are wanting to
(31:47):
compete against inflation and all these sorts of things.
I kind of like it. The market would hate you for
just like accrue like building up cash only on your balance
sheet and having no plans to to distribute that to shareholders
or no way to reinvest it or organically.
Like, I do think, you know, the market would prefer to see
reinvestment for growth with theproceeds of the profits of a
(32:10):
Gold Bond for sure, or or distributions to shareholders
for sure. But you've got something
leftover at the end of that and you decide to keep it in gold or
you've got your available liquidity in gold.
I don't hate it. I don't think the market is
going to love it or value it in general, though.
And there's a couple of like, there's one big precedent I can
point to that it's a very peculiar case and maybe not the
(32:32):
best precedent to talk about. JD, please, you know, do you
know who I'm talking about? I do.
One of our favorite companies. Yeah, it's, it's actually two
companies Tribune and Rand. So these are the JV partners E
Kendana joint venture to, to Evolution mining previously was
it was Northern star of the JV partners.
(32:53):
Now, now Tribune if you look at their books, they equity account
Rand. So all you've got to look at is
the inventories on the balance sheet of of of Tribune as it's
31 December in their accounts. You can you can see gold on hand
at cost 177 million of gold bullion, but it's valued at cost
(33:17):
JD and neither Tribune nor Rand will tell you anywhere how many
ounces they actually have bullion.
You you're just left with that number trying to figure it out.
But if you do your homework and Perth.
Means it's just their fault. Mate, if you.
If you can't trust it. I haven't done this homework
myself, but I trust the people that that did do this homework.
(33:39):
Go through the history and you can deduce what's been produced
and what's been sold over time and you can back out.
The Tribune and Rand collectively have about 130,000
ounces of gold in the accounts. At the Perth Mint, 130,000
ounces of gold, while it might be be valued on the books at
$177 million, is actually worth $680 million a current process.
(34:05):
That's a staggering amount of ofbullion and I I'm pretty sure
that that this is the single largest account of gold on hand
at the Perth Mint. Crazy.
And what gets weirder, mate, if you just add the market caps of
Rand and Tribune together, you'll get $370 million.
Now that is, that's like half the value of the, the gold alone
(34:28):
that they have on hand, not least of which they still
clearly have an, an economic interest in a joint venture that
is still producing a lot more gold that should be worth a fair
bit of money. So this is like as negative EV
as they get. Granted, you can't quite figure
out when you're going to get paid here because because
there's, you know, kind of a, a complicating share shareholder
(34:50):
dynamic and structure and a few obstacles in the way to A, to A,
to an outcome if you were an activist.
One or two. One or two, One or two.
Fascinating example nonetheless,but really it's a ballsy
strategy. Kind of admire the strategy to
to do it and to not really give a crap about what people think
and just just a cream like gold.I hope the Mint still has that
(35:10):
gold. Yeah, I'd, I'd probably
diversify the mints that I hold the the the bars with it's a
lot. Of faith in the Mint.
Is a tremendous amount of faith in the in the Perth Mint.
So, yeah, I, I think it's reallyinteresting if we go back to the
the strategy again, looking at like parallels, we've seen this
in uranium, but it's kind of weird.
(35:30):
Like you don't see it in any other and it just wouldn't
really be OK in any other commodities.
So yeah. Why is that?
It's because it's because like obviously the dollar is clearly.
Yeah, and. The value that arose over time
and gold is seen as like a a clear and proven way of
circumnavigating that, whereas other commodities aren't as
(35:51):
inflation resistant. Yeah.
I mean, a lot of people point tocommodities being the good
inflation hedge, but not all commodities are equal, right?
So yeah, it wouldn't be chuffed if like a zinc producer is going
to start doing this, but gold, maybe it's OK given the many
thousand year track record. So yeah, I think they could have
put a slightly better chart thanjust going back 20 years to to
prove their point. But I think the the strategy is
(36:14):
interesting nevertheless and I don't mind it.
What? Do you think money minus let us
know Ford gold or what cash or none of you above.
Or what else? All righty mate.
Let's thank our wicked partners for today's episode.
Mineral Mining Services, Grounded Sand, Vic Ground
Support, Adriel and Boss Boundary Energy, Buduru.
Buduru. Now remember, I'm an idiot.
(36:38):
JD is an idiot. If you thought any of this was
anything other than entertainment, you're an idiot
and you need to read out a disclaimer.
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